Board packs continue to get longer and costlier to produce. That is the headline finding from an analysis of the data generated by over 1,500 users of the Board Reporting Calculator.
The Calculator is one of a series of tools that were developed by Board Intelligence and ICSA: The Governance Institute following joint research published in December 2017. That research was the first to quantify how much time and money organisations spend on preparing and distributing board packs.
The evidence from the Calculator is that costs are soaring, and the length of the board pack is growing at a worrying rate. Our analysis banded organisations by turnover size and, for each band, the average board pack is at least 50 pages longer than it was a year before. The board packs of organisations with a turnover of more than £500 million are now over 300 pages long, and even those of the smallest organisations are a hefty 180 pages.
The analysis also shows that the resources that go into preparing, distributing and reading the board pack remain high. The average cost to companies is £3 million a year, rising to an average of £7.5 million for the largest companies. In other sectors, the time commitment required is perhaps even more concerning than the cost. Small charities devote an average of 525 days a year to the board pack — a significant share of their resources — while for large public sector bodies it eats up a staggering 4,000 days a year.
These are substantial amounts of money and time. So is the investment paying off in terms of the quality of the board papers and the enhanced effectiveness of boards?
Judging by the data gathered from the ‘Assess Your Board Pack’ online tool — developed by Board Intelligence and ICSA — it would appear not. Nearly two-thirds of those organisations assessed their packs as being ‘weak’ or ‘poor’ overall.
As the primary purpose of board papers is to enable boards to have focused conversation about priority issues, it is very concerning that 64% of users felt that their own board papers are not currently meeting that purpose and that over half felt that the key messages in their papers did not stand out clearly.
The ‘Assess Your Board Pack’ tool asks users whether their organisation follows various practices relating to the board pack. Their answers suggest there are parts of the process of producing board packs to which boards might want to pay particular attention.
Less than half the organisations surveyed provide any formal feedback on whether their agendas are hitting the mark. Doing so would be an easy win. And a third of respondents don’t receive a brief on what the board wants covering in their paper. This is one of the largest complaints we hear from management and is often the root causes of hugely time-consuming rewrites late in the day.
Management teams and boards that we speak to are keen to prepare high-quality papers that support the directors discharging their duties yet nearly 60% of organisations provide no formal training on how to write effective board papers. In addition, nearly 30% do not use templates that could ensure essential issues are covered.
More information on the findings can be found in the latest edition of ICSA’s Governance & Compliance magazine, you can also find all the ‘Effective Board Reporting’ resources on the ICSA website.